October 02, 2009

Intel IDF 2009: On the Cusp of a Whole New Industry

Well before IDF 2009 even began, Intel was on the road selling a new message to selective audiences in front of and behind the cameras. We began hearing about Intel's vision for television at the 2008 Consumer Electronics Show during Paul Otellini's keynote, where he discussed topics such as WiMAX, HDTV and their upcoming SoC called Canmore. Fast forwarding to February 2008 and we see that Intel's mission of promoting the next wave of television and entertainment services went into higher gear behind the scenes where they began promoting the notion that they were on the very cusp of a whole new industry. This report takes a quick peek back at that key 2008 event and then flashes forward to cover two current Intel keynotes that take a peek at the future of television. In the end, we go full circle in order to try and give some meaning to what being on the cusp of a whole new industry actually means.

Cinequest Film Festival 2008: A Peek Back

During a 2008 Cinequest Film Festival panel discussion, Intel’s head of marketing Don MacDonald took the crowd by surprise when he made a marketing statement about being "on the cusp of a whole new industry." The following are just a few of the key statements that were made by Don MacDonald at this event:

"Intel's interest in this is that we really are passionate about technology, we're passionate about the fact that we're on the cusp of a whole new industry for film makers, producers and distributors – and we think that it's bloody exciting."

"When do you know that something is a fad and will fade and die and when do you know that you're on the cusp of a whole new industry? Because as film makers, as producers, as people involved in media, knowing that you're on the beginning of a whole new industry is a big-big deal. Just imagine if you were actually part of the early days of television just starting. What would you do? How do you take advantage it?"

"And so, with all the noise and our notorious impatience you might think that this internet is just one more distraction from making films.But actually the way that we look at it, is we passionately believe that we are on the cusp of a whole new industry and the chart here tries to explain how you tell when a new industry emerges. And this is in the context of entertainment."

"And so my contention is that when you could see changes in the technology; when you could see changes in the actual content itself; and the distribution of that content; and the exhibition devices; then you'reprobably on the cusp of a whole new industry."

Welcome to Reality: The Three Vectors of Innovation

After getting their vision out to film makers, producers and distributors, Intel took their vision to the next level of movers and shakers by inviting executives from Disney-ABC, Comcast, Group M, Yahoo! – and Sony to Intel's fall session of IDF 2008. There, Eric Kim, Senior VP and general manager, Intel Digital Home Group held a roundtable to discuss the coming entertainment revolution.

"In order for this Internet TV to take off, we need more than just great hardware and great software. We need the entire ecosystem of television to embrace this," Kim stressed. "This ecosystem consists of creative stakeholders, stars, distributors, networks, advertisers, service providers, CE manufacturers, great brands with heritage and value from Disney to Sony.We need an industry-wide approach in order [for this] new paradigm to be embraced – "stated Kim. To review the entire discussion on this topic, you could review Eric Kim's 2008 "I love TV" keynote beginning on page 21.

While the public impatiently awaits the arrival of this "whole new industry" that's being promised; a promise that may one day give life to our HDTV sets – we are met with the reality of the day. The revolution will be painstakingly evolutionary in nature - whether we like it or not.Though to keep the fires burning, Intel presented IDF 2009 attendees with a short video to remind them all that true revolutions don't happen in a vacuum and that the historical processes securing a revolution were quickly coming together. Patently Apple's transcript of the "3 Vectors of Innovation" message is as follows:

We all want to change the world. But change takes more than innovative technology. It takes three simultaneous kinds of innovation. Breakthrough technology is required, but so is a great innovative experience for the customer: Content, service, purpose. And we need a solid profitable business model. These three forces don't line up very often - But when they click, hold on to your hat.

For decades after its invention, the telephone was merely an interesting gadget. Changing the world took innovations in business efficiency and in the consumer experience. Only when great technology was finally joined by a useful consumer experience and a workable business model did the telephone take off - A whole generation after Bell's breakthrough.

Radio was invented in 1896. But the business of radio broadcasting went nowhere until the advent of advertising and a coast to coast NBC network. It took all three kinds of innovation to make radio technology matter. With great content and advertising paying the bills, customers lined up. By 1930, 40 percent of American households owned a radio. Soon, practically everyone did.

You could buy a Television as early as 1928 but with almost no programs to watch, almost nobody did - for nearly 20 years. Great content made television technology irresistible. Technology met experience and a business model and an industry was born. In seven years, TV advertising went from zero to a billion dollar business.

Now - here comes the next world changer. Imagine what happens when innovative technology, innovative content experience and an innovative business model converge again: This time, on the most beloved screen in the house. It's that time again: Technology, experience, business. It's all coming together.Welcome to the next wave to change the world. Intel and you are making it happen.

3D TV

As in the tale of the Yellow Brick Road, the way to Emerald City was fraught with twists, turns and unexpected surprises.The promised land of escapism that we know and love today as television is in a state of disarray and confusion. The industry has been trying to desperately find that killer app or killer experience that will put this industry back on track. Intel first laid out the historical framework of the 3 Vectors of Innovation that have to come together in order to ignite a new television revolution - and now we'll take a peek at three new television twists that could be coming our way over the next five years.

In 2008, Intel showed us that they were working hard with producers, distributors and film makers including the alliance that they had just formed with DreamWorks to advance 3D movies like "Monsters vs. Aliens."

It was here that cofounder and CEO of DreamWorks Animation Studios, Jeffrey Katzenberg, presented us with a peek at the next step in 3D animated movies "InTru 3D." He stated last year that "Working with Intel, we've already begun developing 3D tools that will open up fantastic new creative possibilities. Bob Zemeckis, Jim Cameron, Steven Spielberg, Peter Jackson, George Lucas, all of these filmmakers are working today in 3D. They all see 3D as the next great frontier. And, in a word, these filmmakers are the very best. In the next few years, they will be making some of the best films, written by some of the best authors, crafted by some of the best production teams."

Moving forward, we see that the next logical step in this revolution will be to find a way to get these 3D experiences that are rolling out in the theater today, to roll into our living rooms in the not too distant future. Intel's Justin Rattner's keynote covered two companies involved with various aspects of 3D. There was 3Ality who filmed U2's 3D Imax Movie and is now working on NFL 3D gameplay and there was HDI 3D who is close to delivering a leap frog 3D technology for the home market that takes a whole new approach to 3D-TV. As an interesting side-note to this story, you'll get to see a glimpse of Steve Wozniak at an HDI 3D event in the video demo below.

Before leaving this all important topic of in-home 3D entertainment, it should be noted that Apple has been working on an advanced 3D Stereoscopic Display since early 2006. Apple's technology is way ahead of the curve on this front in that their advances could eventually give viewers the ability to perceive 3D TV without the aid of goofy goggles. If Apple ever gets this technology to market first, it's ball game over for the competition.And every Macite in the world just said: Amen.

Informative TV

Another aspect of television that Intel's CTO Justin Rattner covered in his keynote was dubbed "Informative TV." One demo covered a soccer match between teams wearing blue and red jerseys. One of the future features of informative TV will be giving the viewer the ability to track individual players on the field or rink in real-time. In the particular scenario that was shown, each soccer player was being tracked on the soccer field and the viewer was able to call up stats or recent highlights of a particular player's last goal, penalty or whatever stat of interest. No date was set for the debut of this technology and I suspect that it will take several generations of the Atom processor to get us there. Yet the point was well taken that it's definitely in the pipeline.

Once again, Apple appears to be ahead of this trend as well. According to a recent patent, Apple's real-time sporting event technology will be able to track statistical information for extreme sports fans. Fans will be able to watch live fight-stats roll out at the bottom of their TV screens with detailed information about the speed and impact of a knockout punch for instance, or for NASCAR fans, stats on the condition of the cars or the drivers that they're rooting for. Real-time Informative TV stats will provide fans with an all new way of discussing sporting events with their friends and colleagues at the office or on their favorite social networking sites.

Gaming TV

Everyone who loves high-end 3D action or roll playing video games fully understands that technology based on Moore's Law means that the quality of games that we're actually enjoying today on PCs and game consoles will soon be coming to sophisticated yet economical set top boxes over the next several years. If you don't understand that yet, then you haven't been paying attention to the developments that are well underway at Intel and in the industry.

Flashing back to late 2007, Electronic Arts (EA) was calling for an open, standard platform. That was only a few months prior to Intel introducing their Canmore platform. If you think that was coincidental, then I have a bridge to sell you. Mr. Florin, EA's head of international publishing predicted at that time that server-based games streamed to PCs and set-top boxes would become increasingly important. "You don't need an Xbox 360, PS3 or Wii - the consumer won't even realize the platform it is being played on," Florin stated. The key point here isn't about the branded-box itself; it's about whether the branded-box is based on an open, standard platform – or not.None of the above brand names have any interest in an open platform at the moment – so that could very well open the door for Apple TV. Apple has been working closely with Khronos in respect to OpenGL ESand OpenCL for several years now as has Intel and Electronic Arts; the very same Electronic Arts that was calling for an open standard gaming platform in 2007. More on that open door further on.

At IDF Shanghai 2008, Anand Chandrasekher, senior vice president and general manager of Intel Corporation's Ultra Mobility Group, demonstrated the video game Half-Life being tested out on a future Intel mobile device. It was stunning to see just how far along advanced gaming was progressing in Intel's testing lab. High-end 3D gaming is coming to a future iteration of the Atom processor likely to arrive in late 2010 or 2011. This is going to be a game changer for gaming on television via a simple Atom based set top box that could be sporting Intel's forthcoming high-speed optical cable technology code named Light Peak(see the video below for details). The new standard is already being endorsed by Sony: "Sony is excited about the potential for Light Peak technology that Intel has been developing, and believes it could enable a new generation of high-speed device connectivity."

The twist to this later development comes from a recent report found on Engadget that claims that the Light Peak project actually stems from Apple's lab and given to Intel. Another report supports that position which then begs the question: could Apple and Intel be working closely together to bring advanced open platform gaming to Apple TV sometime in the not too distant future? - Or is that just wishful thinking? Time will tell.

Going Full Circle

It all began to unfold with Otellini's keynote at CES in 2008. It then took shape with Don MacDonald's address at Cinequest Film Festival 2008 where we first heard about the concept and term "on the cusp of a whole new industry." And ever since, Eric Kim, Justin Rattner and other Intel executives have been honing a very fine tuned message and vision as to what is needed to bring about the next wave of technology, the next wave of infotainment and finally the next wave of the internet.

Eric Kim's message focused on the "3 Vectors of Innovation" where he tried to both excite and sober us in terms of what to expect from this coming revolution. We were able to hear about the massive social shifts that took place in history and how the first wave of the telephone, radio and television came about. We also heard about the primary force behind each of the revolutions being the power of advertising – a real-world business model and engine that made it all happen. Advertising profits fueled research, investment and infrastructure while employing millions of people in countless related and non-related industries.

In the big picture, the IDF pointed to at least three powerful trends that the industry is now working on to richly enhance the viewer's next generation television experience: 3D TV, Informative TV and Gaming TV. The latter two are going to rely heavily on the internet infrastructure while 3D TV is likely to remain an ever evolving fad until something like Apple's proposed 3D Stereoscopic Display becomes a reality.

Yet at the end of the day, the question remains, what does being on the cusp of a whole new industry really mean? Firstly, Intel's CEO Paul Otellini stated during his keynote that Intel was going to be using the continuum of computing opportunity as an ability to move from personal computers as a company to personalcomputing. And secondly, when reviewing the makeup of attendees at this year's IDF, it became obvious to both Intel and attendees, that the world had shifted again and so must they. Otellini emphatically stated that "This is a profound shift for Intel."

For the average consumer and techie, being on the cusp of a whole new industry, Intel style, means that you're about to go through a twenty-year journey of never ending upgrades of your television just like you did when you chased the PC evolution rainbow that they created. You lusted after every megahertz of power your wallet could afford - just to gain bragging rights. Well, the dream merchants of the PC industry are now moving into the infotainment industry and the new boys in town are taking over. The days of owning a television for ten or twenty years are officially over.

The industry knows that big changes are coming and we can all expect to see as much turmoil in the market going forward as we do breathtaking breakthroughs. Hell, just yesterday, The Wrap broke the news that Comcast could end up owning NBC Universal. That same report also hinted that it could spell the end for Hulu. And this is just the beginning of the upheaval that we'll be witnessing over the next decade as the industry shakes out the new winners and losers. This is the changing of the guard from one generation to the next. This is like the end of the horse and buggy era giving way to the Model-T. One industry dies and another begins. It's a cycle and it's going to be a very wild ride. Hold on, because everything is about to accelerate like you never thought possible.